Bhavin Shah, CEO at Equirus Securities told CNBC-TV18, "Finolex Industries is the largest player in the pipe segment. However, the company has had a volatile earnings history because of number of factors that affect their earnings. We believe that they have taken steps such as hedging their input cost which are input raw material which are imported. With an increasing volume of pipes and less of PVC sell through in the market they should be able to at least reduce some of the volatility in their margins."
"Free cashflow generation of this company has been very good. Some of the other stocks in this sector have done significantly well and we think that with Finolex exhibits lower volatility in earnings and healthy growth in high teens, the stock could give you upside both from multiple re-rating as well as growth. That is why we are recommending Finolex Industries. Also, very good dividend payout which is one of the key reasons why we like the stock," he added.
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